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China Significantly Increases Fines for Workplace Accidents

Companies involved in serious workplace accidents will be fined up to 20 million yuan (3.25 million U.S. dollars) and managers found to have failed in their duty to ensure safety levied between 30 percent and 80 percent of their annual income, under a new amendment to China’s Workplace Safety Law.

The revision was adopted at the Standing Committee of the National People’s Congress (NPC) Aug. 31, 2014, according to China’s Xinhua news agency. The new law comes into effect Dec. 1, 2014.

The penalty cap is a significant increase from the current statute, under which managers face fines between 20,000-200,000 yuan and companies no more than 100,000 yuan.

The new law also calls for managers responsible for “serious” and “extremely serious” accidents to be banned from those positions in the same industry.

Serious accidents are defined as those causing 10 to 30 deaths, 50 to 100 serious injuries, or direct economic losses of between 50 and 100 million yuan.

Extremely serious accidents are those that kill more than 30 people, seriously injure 100, or result in over 100 million yuan in direct economic losses.

“The Workplace Safety Law, which took effect in 2002, has helped reduce malpractice, but many problems still need to be addressed,” said Yang Dongliang, director of the State Administration of Work Safety. Specifically, government regulations and standards are not being properly implemented at the local level, he said.

The administration investigated 44 serious workplace accidents and prosecuted about 300 people for violating workplace safety laws in 2013. Light punishment and lack of supervision are believed to be among the major reasons for the negligence behind frequent accidents, according to the agency.

The new law also enhances the supervisory power of occupational safety watchdogs and local governments, especially those at township level. Most of China’s occupational accidents occur at small businesses in rural areas, according to the agency.

Additional reforms include:

Increased fines for failing to provide safety training for employees and not abating hazards after being notified of them.

Allowing government regulators to blacklist large companies that may not be deterred by fines.

Allowing regulators to force factories to suspend operation by cutting off their power supply, if their workplace is considered highly unsafe and likely to cause accidents.